Today marks the end of a long week of mobile advertising webinars (including this one organized by Mobixell  – password adit123) and interviews, activities which for me drove home the pivotal importance of relevancy in all we do. Like a pop song you keep hearing in your head, my ears are ringing with how many times I have heard executives at brands, agencies, and operators echo the increasing importance of relevancy. In fact, Andy Bovingdon, Bango, VP Marketing, in yesterday’s interview for the Mobile Advertising Research U.K. project, was by far the most adamant to date.

In his view, mobile advertising is a form of mobile marketing that has many forms – all of which must be relevant to us. “The key across all platforms and forms of advertising – search, SMS, banners, and barcodes – is the relevance and the ability to target. Is mobile another screen, or the fourth screen, as some say? I would say it is the first screen. It’s always-on and always with us, and that means we can learn a lot more about the visitors [but not individual visitor] to a site or an ad campaign. We can know more about the people who interact with advertising, and we must use this to give them advertising to interact with.”

Put simply, relevancy rules (!) The message isn’t lost on MSG. Almost five years ago, I wrote the first report on mobile search and content discovery, where I preached the importance of delivering the right content to the right person – better yet in the right context. And that has been my message ever since. (Also reflected in the MSG strapline: At the intersection of content and context.) It’s where the action is!

And if you think it only applied to mobile content portals, then I have one word for you: App stores. This well-written and thoughtful column from Mark Lowenstein speaks volumes. He makes a plea for more personalization in application storefronts, and companies would do well to listen.

“I think the most important way to differentiate in this growing but increasingly crowded market is to deliver a more personalized, contextual applications experience. In most cases, all users launching an app store are presented with the same menu. There have been some early stage attempts to enable users to do some content configuration on operator or third party portals, sort of a wireless version of My Yahoo. But if we’re dealing with tens of thousands of apps and a small screen device with limited input capability, we have to get a lot smarter about what is presented to the user, with the magic being done in the background rather than relying on the user to self-configure.”

Where’s the connection with Blyk? The answer is evident when we consider (in my view) a  milestone quote/observation (below)from Antti Öhling, Blyk co-founder and CEO U.K.

Relevancy, as I illustrated above, plays a major role in content/app promotion and sales, and it will play an even larger role in mobile advertising.

I made this point in my advertising webinars (in fact, I used Blyk examples and slides in each). And I also addressed this issue in my Q&A with Antti, working it in between the questions that had to be asked following the controversial announcement last week that Blyk, the world’s first ad-funded MVNO, was moving to an operator partnership model. Why is Blyk making the switch? How can operators become media companies? And Why should they be wary of Internet players? These are just a few of the questions we explored in the following Q&A.

Q. First – let’s go back to the NewMediaAge article that started it all. I read your statement. My question is why?

A: We announced already in November 2008 that Blyk will change from MVNO to operator partnering model.  So this is not a new business strategy, just the next step in Blyk’s evolution.  I was surprised by the New Media Article.   The problem is that talking about media as we do is confusing for a lot of people, the NMA included. People fail to understand that being an MVNO is not important; it’s merely a means to an end.

When Blyk started out, the aim was to make mobile advertising work. And if you look in the traditional media, there isn’t a media in the world that wouldn’t somehow include the consumer of that media into the value chain. So you look at mobile and ask where is the consumer in the value chain? Because mobile companies come from a telco world, they were thrilled about the idea of inventory.  They think: Wow, we have inventory, let’s use it.  Well, there is plenty of inventory in the world. But inventory doesn’t make it a media. We looked around and said OK, we’re moving from an MVNO business model into a partnership model in order to roll our consumer offering out to a much larger audience and much quicker.

People have asked what is going to happen to our member [subscriber]  base. We spent a lot of energy and time creating a community of 200,000, so we are definitely going to take good care of our core assets. Everybody who works in the media industry understands how valuable an audience is.

Q: I would like to know what happened to the MVNO model and the ambitions behind it. You are not going to be an MVNO in the other markets in Europe…

A: Blyk’s goal is to become the biggest youth engagement media in the world.  The U.K. is a proof-of-concept. It works, and now it’s time to shift up a gear in expansion. We are switching from the MVNO model to operator partnerships in the U.K., Europe, and Asia. Blyk is currently validating the different options, and active negotiations are underway.

Why the switch? An MVNO means that you have to make up-front heavy investments. We needed to do it in the U.K. in order to get the whole machinery working. We needed to have access to all the tools that the operators have in their server rooms. Now that we understand how to use it [technology] we know how to help them. We know exactly how they can combine operator infrastructure with our ad engine and campaign management. We can make every campaign pixel perfect but what’s more important is that they [campaigns] are extremely relevant to the receiver. We saw the MVNO model as too slow for growth. If we partner with operators, we can triple or quadruple the speed, and reach the scalability that many advertisers are looking for.

Q: A question via Twitter from mobile advertising maven Helen Keegan. Let me confront you with what’s being said out there in the market place. For one, people are leaving Blyk. What do you have to say?

A: I’m not dismissing it.  We have never denied that we have streamlined the organization. That’s the modification we’ve done, so we are now steering this with a similar volume, but with a much lighter ship, which makes sense, especially in the current financial situation. We are seeing month on month growth in our advertising revenue, which in this environment is very promising.

Q: Tell me more about the partnership model.  How does the model function in practice and how many operators are you looking at in each market?

A: Blyk is a simple end-to-end proposition that covers everything from ad platform, campaign management, user experience, and audience management to technology.  Sometimes when I discuss this with operators, I say think of Blyk as a Coke as this example makes our role easier to understand. We have the recipe and we have the brand. People understand Blyk; young people understand what it means when we come to a country.  The recipe is how you make it work.  The operators have the factories for making all the refreshments they need, and they have their existing distribution channels. Basically, they have the works. But if they bring Coke in there, they can get so much more volume and so much more value. It’s a lot more interesting – and lucrative – to have Blyk as part of the operator offer. In other words, they can expand their reach to offering another well-known product.

Blyk is a brand focused on young consumers and our goal is to become the biggest youth engagement media in the world. We have deliberately chosen to target this audience, but it doesn’t mean that operators couldn’t work with us to make a similar offer to a different segment or to their entire customer base.  But then it wouldn’t be called Blyk at that point. As part of this partnership model, we’ll most likely choose to partner with one operator per market. Using what we bring is the fastest way for operators to get ahead of the game before their competition.

Q: Speaking of competition and competitive edge, who are Blyk’s competitors now that you are making the move from MVNO to mobile ad enabler?

A: The competitive landscape is actually the online Internet giants. It’s the companies we know from the Internet who are now wanting to make the operators dumb pipes, just selling data tariffs, so that they [the Internet giants] can deliver [their services/content/advertising] on top of that. If you think about the user experience, it’s not really a great model and it doesn’t create any value for the operators.  They [the operators] have no reason to be there and no role to play. But, if we add the engagement media, as we call Blyk Media, then the operators will have all the tools, all the bells and whistles under their control. They have it all.  We just show them how it needs to function in a way that no online player can replicate, a way that works more efficiently and creates a much better user experience. The Internet giants are treating mobile as part of their online offering – this will not work.  In Asia, for example, ‘online’ hardly exists, whereas mobile is widely used. Mobile really is the 7^th mass media.

Q: What does Blyk concretely bring to the table?

A: We have a full sales force, full understanding of how the media works, how it should be sold, how the campaign should be managed, and how you drive traffic to app sites.Based on 18 months’ research before launching in the U.K. in Sept 2007, and because we were a full MVNO with many specific custom-built functions, we have gained unprecedented expertise on how  [mobile advertising] works end to end. We call that magic dust, because it’s not enough to have just the hardware. You need to have a special understanding of the marketplace. Some people in the industry say Oh, we’ve bought this ad platform so now we are a media company.  No, you’re not. You might have a platform that can send stuff to people, but that doesn’t make you into a media company.

Q: What else do you need?

A: You have to start with an opted-in audience; you have to start with your full capabilities of profiling these people.  You then have to create a media environment where the people are happy interacting with the message that you are sending or the messages that they get in order to get the responses, and there you can use the profiling methods, there you can use the whole enrolment method.

You also have to bring something good to these people; a concept that they feel it is valuable to be part of. This personal value can be a free offer or it can be something else, but it has to be there to make communications relevant.  You have to get something out of that equation.  Getting a banner to your phone which you have not ordered gives you nothing.  If it’s not even profiled, that becomes spam and that leads to churn

Today, the way most of the mobile advertising works is not media.  We’ve been able to show that if you make it work, it becomes unprecedentedly efficient, with an average 25 percent response rate. This is what mobile can deliver, provided that – and again I repeat – you have an opted in audience, you have made them understand why it’s beneficial for them by profiling, by providing them relevant advertising which starts to feel like a service. By enhancing the user experience and making it richer than anything else, you achieve high response rates and you can call yourself a media company. That’s been completely missing from the telco industry because operators don’t think of themselves as a media, they think of themselves as a utility company providing a service.

Q. Just curious here. Why the focus on advertising campaigns when I have it from other agencies that search is red-hot?

A: Mobile search. Yes, that’s one revenue stream, obviously. But it’s not going to be the whole equation. It’s all based on a mobile Internet concept which, though it can provide information and all sorts of other things, hasn’t proven to be a great revenue generator per capita, and that’s important because click through rates are low and they will get even lower the more you have similar types of offerings.

In Japan, for example, a country that has had mobile Internet for four years, the lack of relevancy means the market is still under $1 billion and it’s a 120-million people market.  It’s dismally small because the click-through rates are so low, the value is low.  In the Blyk model, you get high response rates, and the value of any single customer is multiplied. A telco may think it needs to have 100 percent penetration. But we are a media company. A media company with say 3 or 6 percent of the entire U.K. population following it is still considered to be a big media player.

Q: I want to talk about your move to mobile portals. I’ll cover this further in my podcast with Leif [Fagelstedt] next week. But why don’t you just walk me through what you are doing and why…

A: We wanted to apply our methods to the traditional content business, which is suffering from the fact that service discovery and content discovery is so poor. Even in the iPhone App Store, the content is great but the problem becomes how do you find it? We know the importance of personalization and engagement from mobile advertising, and we felt the impact would be positive [on discovery] if we could push [suggest] content to people based on this [what we know about them]. And the numbers bear this out; they are very good.

We tested different types of offers and when we changed our consumer offer from the original one to the GBP15 a month allocation, the requests to join the network went up by 30 percent. That was a surprise because it normally doesn’t happen.  You make a lower offer, not a higher one, and people get more interested. With this new member offer, we gave people the flexibility to use Blyk as they prefer – voice, text, or data – and this gives us the opportunity to start testing data usage and finding how that correlates if we then begin to use our engagement media and start to push people to content. So, right now it’s about understanding all of the mechanics of this. We’re still building it, we’re still learning it, but we want to bring some new rules into that game as well.

Disclaimer: Bango is an MSG supporter.

Tags: app store, bango, Barcodes, behavioral targeting, Blyk, Coke, Contextual, Google, Mobile Advertising, Mobile Advertising U.K., Mobile As The 7th Mass Media, Mobile Marketing, Mobile Search, Mobixell, relevancy, Tomi Ahonen

This entry was posted on Friday, May 22nd, 2009 at 7:45 pm and is filed under Mobile Advertising, Mobile Content, Mobile Research, Mobile Search, Mobile Social Networking, Personalization. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.